The government plans to reduce the financial burden of Tokyo Electric Power Co. by allocating gains from future sales of TEPCO shares for cleaning up Fukushima nuclear disaster areas, sources said.
The government plans to reduce the financial burden of Tokyo Electric Power Co. by allocating gains from future sales of TEPCO shares for cleaning up Fukushima nuclear disaster areas, sources said. The move is bound to stoke controversy as leftover assets from government-sponsored corporate rehabilitation have traditionally gone into state coffers. TEPCO, operator of the crippled Fukushima No.1 nuclear plant, is expected to spend up to 2.5 trillion yen ($24.3 billion) for decontaminating communities affected by radioactive fallout. According to sources, the plan will be discussed at a meeting of the government’s nuclear emergency response headquarters as early as Dec. 20 as part of steps to speed up reconstruction and support TEPCO. It will also be included in TEPCO’s rehabilitation plan, expected to be complied by the end of the year. The government-backed Nuclear Damage Liability Facilitation Fund owns TEPCO shares worth 1 trillion yen in book value. It plans to sell its stake in the late 2020s and 2030s after the utility turns around its finances. The government expects 2 trillion yen in gains if the stock sells at 900 yen per share, compared with 524 yen on Dec. 16, which would cover a large part of TEPCO’s decontamination costs. A government source said the proposed arrangement will serve as “an incentive for efficient operation,” saying that TEPCO will have to pay less for decontamination if its corporate value improves and share price rises. But critics could argue that profits should be returned to taxpayers because the government knew that its investment would be lost if the utility went bankrupt. The state-backed Industrial Revitalization Corp. transferred 43.2 billion yen in assets to state coffers when it was disbanded in 2007 after turning around Daiei Inc., Kanebo Ltd. and other companies. About 1 trillion yen made on sales of government-held shares in Japan Tobacco Inc. this spring was used for reconstruction from the 2011 Great East Japan Earthquake and tsunami, which triggered triple meltdowns at the Fukushima No. 1 plant. The government is providing loans to TEPCO through the Nuclear Damage Liability Facilitation Fund to help the utility in decontamination and paying compensation to nuclear disaster victims. It plans to raise the maximum amount of loans from 5 trillion yen to 9-10 trillion yen. About 5-6 trillion yen would be used for compensation, and 1 trillion yen would be used for intermediate storage facilities for radioactive debris, in addition to 2.5 trillion yen for decontamination. (This article was written by Mari Fujisaki and Takashi Ebuchi.)